How DTC may bring relief on I-T rates

How DTC may bring relief on I-T rates

After the Direct Taxes Code Bill is approved by Parliament, it may bring with it major relief for personal income tax payers.

At a press conference on Monday, Finance Minister P Chidambaram said when the final version of the Bill was tabled in Parliament, the government would abide by the recommendations of the parliamentary standing committee on DTC.

The parliamentary panel, chaired by former finance minister Yashwant Sinha, had recommended the DTC increase income tax exemption limit to Rs 300,000 a year, against the Rs 200,000 proposed in the Bill.

How DTC may bring relief on I-T rates

It recommended contribution to social security such as pension be exempted up to Rs 150,000 a year; medical insurance up to Rs 100,000; medical insurance for dependent parents up to Rs 50,000 and professional studies and education Rs 50,000.

The panel did not suggest any change in the corporate tax rates imposed.

The finance minister did not specify a date for the implementation of the DTC, which would replace the archaic Income Tax Act of 1961.

Initially, DTC was scheduled to be introduced from April 1.

However, the standing committee had submitted its report to Parliament only in March.